Azar: Identifying decision-makers is key on siting transmission

Lauren Azar, the senior advisor to Energy Secretary Steven Chu, kicked off TransmissionHub’s TransForum East in Arlington, Va., Dec. 5 by providing a primer on transmission planning and overcoming opposition.

“No line was ever built that didn’t come out of a planning process,” Azar said, noting that lines are proposed and built for three reasons: reliability, economics and public policy.

“We all know what reliability means [though] there are still questions about what standard of reliability we should be building toward,” she said, suggesting an area that can be questioned by a project’s opponents.

She called economic lines “quite fascinating,” especially to merchant transmission providers who are “essentially planning their transmission lines based on arbitrage.”

Lines are also proposed to meet public policy goals, she said, adding that they are not immune to opposition. “Some folks don’t want to see long lines built to help convey renewables because they disagree with that policy,” she said. “Do they have the opportunity to stop it?”

The pivot questions for gaining approval and effectively countering opposition are, “Who is the decision-maker and on what basis are they making their decisions?”

While public service commissions, RTOs and ISOs, or other governmental entities are the guardians of the public interest when deciding whether lines should be approved, she cautioned that planners need to understand which groups or individuals influence those bodies.

“The [regulators] are the decision-makers, but who drives their decisions, and can folks with parochial interests actually influence the decisions of people that are making decisions based on the public interest?” she asked, noting that the answer was an unqualified “yes.”

Opponents, she said, can stop transmission projects during any of three stages in the process: the planning, siting, or cost allocation stage.

“You need to keep in mind that the decision-makers can change during the process,” she added.

Azar also pointed to some facets of the current planning process that need to be improved, including the planning horizon. She argued many areas are using a planning horizon that is simply too short.

“Some parts of the United States plan five to ten years ahead, but if it takes us 10 to 15 years to build a line, why are you only planning five to 10 years out?” she asked.

Another facet of the current process that must be improved is cost allocation. The way it is currently approached by the industry has a number of limitations, Azar said.

“Transmission flows change over time,” she said. “They change constantly. So why is it that, when we do cost allocation, we take a snapshot to define the beneficiaries, and that’s who pays?”

Many of the limitations within the current process are based on the lack of granular data, the snapshot in time and decision-makers who don’t have a sense of how networked the eastern interconnection is, she said, adding that needs to change.

For example, she said, as a state utility regulator in Wisconsin, she became aware of a transmission line in West Virginia that was affecting operations in her state. “We had no jurisdiction over what was going on in West Virginia, but it was creating a real headache for us in Wisconsin,” she said.

Better data would help interested parties understand the system’s interconnectedness, which could lead to better cooperation in addition to more effective cost allocation.

“Just think about how we do the calculus of cost allocation and whether it is able to pick up that kind of interdependency and make decisions,” she said. “How can we make decisions on cost allocation and what lines need to be built in Wisconsin if we have no jurisdiction over what’s going on in West Virginia?”

DOE is currently doing modeling, research, and development to identify ways to help overcome such barriers.

Some solutions, she predicted, could come out of the 2012 triennial congestion study that is being drafted. That study “can aid in the planning process by laying the groundwork for the national interest electricity transmission corridors, or NIETCs, which help in the siting process,” she said.

While citing several threshold questions when planning transmission, including the footprint, purpose and time frame, Azar said the most important questions planners should continually ask are, “Who makes the decision, and on what basis are they making decisions?”

She added, “If you can answer that, you can help build transmission.”